Incremental change, and revolution: Construction Marketing’s facts of life

Sometimes you can try too hard -- and you end up in a frustrating struggle when you can succeed with less effort.

An image of the Paris newspaper market in 1848. Revolutionary conditions of course challenge our norms; and the changes we would take for revolutionary marketing initiatives in our own businesses are generally quite exceptional.

In yesterday’s post, I made clear that the good-old-fashioned genuine client service and relationships, the core of the experience between your business and your current clients, provides the foundation for effective architectural, engineering and construction marketing. If you can’t get the basics right — and your clients are not (without prodding) repeating and/or referring new business to you, no amount of money you pour into external marketing will solve your problems. You’ll constantly be chasing leads, struggling to retain profitability, and churning customer after customer.

Yet there is another side to the picture, and I’ll call it the distinction between incremental change and revolution. Incremental change works quite well if things are going well, or you’ve reached a fairly stable stage. You tweak this or that system, process, or marketing strategy and (if you are doing it right) test against the norm, and improve your situation.

If you have 75 per cent repeat and referral client business, your measure of success in this aspect might be (a) to increase your repeat and referral business (with a proportionate increase in sales volume) to 80 per cent — or it might be to test out some outbound marketing with the goal of increasing your non-referral/repeat business by 10 per cent (of overall total current sales volume), without decreasing any of your current repeat/referral volume.

The first strategy may be seen as incremental; the second, revolutionary, because you will need to try some radically different things to succeed.

Consider the impact: An increase of five percent in business volume with virtually no marketing cost, quite attainable with a program to enhance your repeat and referral processes, will have a significant effect on your bottom line. Even allowing for additional hard costs of half of that additional volume, you may see a margin increase of 2 to 3 per cent — no laughing matter, when you are doing enough business. I mean, what could you do with an effective dividend increase of 3 per cent?

However, the second — outbound marketing — stretch goal — has more long-term implications and consequences.

If you increase your non-referral marketing volume by 10 per cent, without sacrificing any of your current repeat/referral business, you may see a 50 per cent or greater growth rate. Why? Well, the multiplier effect takes hold.

Assuming 75 per cent of your current business is repeat and referral, you would thus multiply your overall yield year after year by three times at least, and if you continue this enhanced non-referral/repeat business campaign for a few years, the yield compounds. (I realize there is likely to be less “stickiness” of new clients from external marketing than established clients, but the numbers can still be astounding.)

Of course, this enhanced marketing process has significant risks and costs. You will need to invest significant resources in outreach, media, business development, lead generation and management, and you will need to do this carefully to avoid stretching your capacity to serve your current clients the way you should. More importantly, you need to be patient, as you will undoubtedly make mistakes early on, and will have to learn from them.

Will you make this stretch? Probably not, and it probably isn’t necessary. After all. if incremental changes without great effort can enhance your business and lifestyle, without stressing your resources and taking unnecessary risks, why would you push the limits. The bigger dreams/risks often occur primarily in start-up situations, or when you have a business crisis and need to get around it. But if you want to dream and live big, a revolutionary change for your AEC marketing strategy might have appeal to you.